Ugandans to pay Shs100 for every litre of fuel consumed

Each week, Ugandans wake up to a new tax meant to be levied on them or an item, the latest is fuel.

Motorists are due to pay more, according to the new tax plans by the Ministry of Finance. The ministry Friday morning announced Shs100 tax on each litre of fuel starting in the 2018/2019 financial year.

State Finance minister David Bahati says the new levy is meant for the maintenance of roads.

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Government expenditure continues to grow, with the official figures from the ministry of finance, standing at shs17.4 trillion in the ending financial year compared to the 12.8 trillion collected in the 2017/2018 financial year.

And as the country moves to widen the tax base to fund the different infrastructure projects especially roads, government has introduced a Shs100 levy on each litre of fuel.

Finance State Minister David Bahati says despite the sky high fuel prices, the new tax is meant for road maintenance. A litre of petrol at the fuel pump on average now goes for 3,900 Uganda Shillings.

“We spend lots of borrowed money on constructing roads but they don’t last because we are limited with funds of maintaining them, so this tax is strictly going to be fenced for that,”Bahati said.

With this levy, it is hoped that government will reduce on its borrowing appetite to fund the massive infrastructure projects. The finance ministry is expected to present a 30 trillion, 905 billion budget for the 2018/2019 Financial Year, of which 23 trillion, 658 billion is to be raised domestically.

“Next year we are going to draw over Shs200 billion from the petroleum fund and this money has to be allocated in the budget,” Kenneth Mugambe Director Budget MOFPED said.

Some Ugandans are concerned about imposing more taxes on fuel, yet government hasn’t done anything about the current high prices.

“We wont mind the taxes but no results can be shown by government in turns of service delivery” says Mujibu Kalule.

“Those taxes only benefit a few people who don’t even think of Ugandans, fuel prices are already choking us and now adding taxes? Namawejje Sarah laments.

Experts are however concerned that players might take advantage of these measures to fleece the population.

Government has further proposed a 30% income tax on SACCOs and a 1% exercise duty on mobile money transactions.